Ian Scott to the Canadian Telecom Summit “Fostering Choice, Innovation and Better Prices for Canadians”

Speech

Toronto, Ontario
June 3, 2019


Ian Scott, Chairperson and CEO
Canadian Radio-television and Telecommunications Commission

Check against delivery

Good afternoon.

Before I begin, I would like to acknowledge that we are gathered on the traditional territory of Indigenous peoples. I would like to give thanks and pay respect to their Elders.

Thank you for inviting me to speak to you today. It’s a pleasure for me to address your conference for the first time.

Since I’ve been on the job, I have spoken about the work that my fellow Commissioners and I have done with regard to regulating in the public interest. That work, by the way, is very much in keeping with the theme of your conference: the notion of creating a foundation for innovation. It’s our role to collect and help articulate the wishes of Canadians in the marketplace. We build on that foundation—those ideas and opinions—to design our policies. These in turn foster healthy market dynamics with the goal of providing all Canadians, in all regions of the country, with choice, innovative services and affordable options.

Our recent work has taken many forms. We invited Canadians to share their views on the possible creation of a new Internet Code. We issued a report on misleading or aggressive sales practices by telecommunications service providers. We launched a comprehensive review of mobile wireless services. And we are launching our Broadband Fund to help close Canada’s digital divide.

I’ll touch on each of these in turn during my remarks today. But the key message I have for you is that Canadians have been clear about their wishes. They want their service providers to treat them with respect. They want to know that the person they’re dealing with—whether on the phone, in person or over the Web—is trustworthy. They want a marketplace for services that fosters choice, innovation and better prices.

As a country, we have successfully deployed the latest technology—including broadband and mobile wireless—in most areas, and are continuing to work to reach those in underserved areas. Where Canada hasn’t performed as well is on retail prices.

As the communications system regulator in this country, the CRTC has a unique role. We must ensure consumers’ needs are being met—which includes robust competition on prices—while enabling businesses to do their best work. Our role is to create those conditions that best stimulate innovation—while keeping foremost in mind the imperative of ensuring that Canadians are well served by their communications system.

That’s a lot of ground to cover. Let me explain how we’re delivering on these imperatives with some examples of our recent work, and the challenges we’ve attempted to resolve.

Sales practices

I want to begin with an issue that is very much front and centre for the Commission these days, and that is how service providers treat Canadians. We have heard a great deal about questionable practices in the marketplace. Where Canadians are purchasing products and services that they don’t need or don’t want, or are unable to resolve issues with their providers.

An informed and empowered consumer is one that has the necessary information to make the best possible decisions. That’s why, in 2013, we created our Wireless Code. It enables consumers to be better informed of their rights and obligations when it comes to transactions with their wireless service providers. The code makes it easier for individuals and small-business customers to get the information they need about their service contracts, and in an easy-to-understand fashion. It also lays out a series of consumer-friendly business practices for providers to follow.

Four years later, we established our Television Service Provider Code. Like the Wireless Code, it sets out procedures for consumers and providers to follow in their interactions with television service providers. It adopted many of the same fundamental principles as the Wireless Code, including clear and simple explanations of rights and obligations.

Last year, we started looking into the question of whether a third code—an Internet Code—was necessary. Why contemplate creating a third code for Internet service providers? Because the number of complaints to the Commission for Complaints for Telecom-television Services relating to Internet services are on the rise. Canadians feel they have insufficient protections and recourse. Part of our role as a regulator is to ensure that Canadians feel confident and secure in their dealings with service providers.

We held a public consultation on the matter in November and December, and asked for comments on a working document. In February, we invited Canadians to share their views on the need for—and importance of—such a code in another way. We asked them to provide their feedback via our Facebook page. We asked Canadians to share their experiences about the clarity of the contracts they sign, about bill shock, about cancelling or changing service providers—and more. Our decision will be published soon.

Our work on the Internet Code is, of course, separate from our investigation into misleading or aggressive sales practices, which is the next issue I want to discuss. You will recall that the Governor-in-Council directed the CRTC to look into this matter last year, and to investigate a number of issues about consumer rights, expectations and protections.

We released our report on this troubling issue earlier this year. I hope you all have had a chance to review the document. In it, we found that misleading or aggressive sales practices occur far too often, and that they have a harmful impact on Canadians—especially those who are vulnerable due to a disability, their age or a language barrier.

Our report shares the stories of a handful of Canadians—people whose experiences are representative of the feelings of many others—who were misled or unfairly pressured into buying services they didn’t need or want.

There is the example of the senior in his eighties who didn’t own a tablet, a computer or a smartphone, but was sold an expensive Internet plan.

Or the elderly woman from Montreal who was persuaded by a sales representative to sign a document—which later turned out to be a sales contract—without ever being told what she was signing.

Or the individual with autism who is challenged by verbal interactions, and was denied written information from a provider’s sales and support teams.

Unfortunately, these examples are common. All too common. No provider should treat consumers like this. You can do better. You must do better.

With these concerns in mind, we now have a better sense of the nature and extent of the problem. And we will begin to take action. In the near future, we will roll out a secret-shopper program targeting different sales channels and locations across the country. If we find that these practices aren’t being curtailed, rest assured that we will use all the enforcement tools available to us.

By the way, if you want evidence that public input matters to the outcomes of our processes, look no further than this initiative. A team from the University of Ottawa conducted their own secret-shopper research and submitted their results on the public record. There is a mention of their work in our report. Its usefulness inspired us to consider creating our own program.

As we put measures such as this in place, we will continue to monitor the market through our own means. By this I mean we will continue to collect evidence on trends and behaviours, and take steps to correct those we judge to be detrimental to consumers. We are troubled, for example, by a practice that has recently emerged whereby certain companies charge consumers for technical-support calls, or for making changes to their plans. We have asked companies to provide details and are now analyzing their responses.

I appreciate that business is in business to make a profit. But ask yourselves whether it makes sense to upset clients or violate our regulations for the sake of your bottom lines. And remember that if you act in violation of our rules, you run the risk of facing the full extent of our enforcement powers.

Spam and telemarketing

On the topic of enforcement, I’d like to speak about another important part of our mandate.

It’s popular opinion to suggest that consumers complain most about the prices they pay for communications services. And while it’s certainly true that affordability is a concern for most Canadians, that issue isn’t their number-one complaint. The CRTC receives more contacts about nuisance communications—specifically, spam and telemarketing—than any other subject.

This is a significant challenge faced by countries across the globe. It’s certainly something that we at the CRTC cannot address by ourselves. While we have the regulatory authority and the enforcement mandate to do so, that alone is not sufficient. Those tools are reactive. We need solutions that are proactive. That bring us collectively to the point where unwanted telemarketing calls and spam never get through to Canadians.

Many of you in this room have been actively working on minimizing the effects of spoofing, investigating technical solutions at the network level and exploring options for Canadians to manage their telephone services. While these initiatives are driven by recent regulatory policies, you don’t need to wait for regulation to be of assistance.

We need more action from industry—from you—to protect consumers from these and other forms of nuisance communications. How can you do that? By sharing information on bad actors making use of your networks – this abuse leaves behind traces that you are uniquely positioned to see.  And by holding your own partners—vendors, contractors and other third parties—to the high standards that I know you place on your own business, the more effective we can be. Indeed, the more effective we can all be.

By that I mean we target our compliance and enforcement work to the areas that need the most attention. You in industry can operate with greater assurance that your network traffic is free from malicious activities. And together, we protect the interests of Canadians and respect their wishes.

Best served by choice

Let me turn now to talk a bit about our work in bolstering competition and innovation in the market for wireless services.

Consumers are best served by choice. Indeed, the need to improve choice and affordability for Canadians was precisely what drove us to bring forward our comprehensive review of the state of the mobile wireless market in February. We had originally planned to hold that review next year, but given that the market has not evolved as we expected, waiting even an extra year was too long.

There have been positive indications that the market is changing. The data for 2018, which we will be releasing next month, indicates that prices for wireless services have decreased across all service baskets.

This is certainly a step in the right direction. But I’ll be frank. We were, and we remain, concerned that while the industry has grown and evolved in a number of important ways in the past few years, progress has been slow elsewhere. That should not be the case. Because while providers such as Bell Mobility, Rogers and Telus have introduced lower-cost data-only plans at our direction, that alone is not enough. More can be done to advance consumer interests.

We want to see a broader range of affordable wireless options for consumers. We want to ensure that the framework for wholesale mobile wireless services responds to the needs of Canadians. And we want to understand how increased competitive choice, including mobile virtual network operators—MNVOs—can be supported in the market.

This last point is particularly important. MVNOs have been unable to gain a significant foothold in the market. It’s our preliminary view that a robust and competitive wireless market that includes participation from MVNOs will increase choice, innovation and affordability for Canadians. Regulatory intervention may be required. At least until such time as MVNOs can properly establish themselves in the market.

Our review also looks ahead to the deployment of fifth-generation—5G—wireless technology, and the role the CRTC can play to facilitate innovation on this important front. One of the questions we will consider is whether we need to put regulatory measures in place to facilitate the development of small cells and 5G network infrastructure.

5G is expected to provide an evolutionary leap forward that will benefit Canadians, municipalities, businesses and the overall economy. Think smart cities that will use real-time data to manage traffic and fleets of autonomous buses, resulting in improved safety, lower emissions and enhanced quality of life. That’s just one example out of many that have been put forward. We have to make sure that Canadians are not left behind in the race to deploy this innovative technology.

The initial period for public comments on our review closed on May 15. Our next step—which is to analyze the submissions on the public record—is underway. We will conduct public-opinion research into the key issues I referenced a moment ago, and will add those findings to the public record. All these steps will culminate in a public hearing next January.

Closing the digital divide

I want to talk with you about one final challenge we face in the telecommunications world. And that is access to broadband.

In 2016, we declared that broadband Internet access was a basic telecommunications service. Our decision established a universal service objective for all Canadians—regardless of where they live. We said that everyone should have access to voice services and broadband Internet access services on fixed and mobile wireless networks. We set new targets for these services of at least 50 megabits per second for download and 10 megabits per second for upload, as well as access to unlimited data options for fixed broadband services. And we said that the latest mobile wireless technology should be available not only in homes and businesses, but also along all major Canadian roads.

As I’m sure you know already, such services are not universally available. Because while 84% of Canadians have access to services that meet the fixed broadband targets set in our universal service objective, that statistic alone does not tell a complete story.

The rate of broadband Internet penetration is far lower outside urban centres. For all the people in Toronto, Montreal, Ottawa, Calgary and Vancouver—and any other major centre you care to name—can connect at fast speeds and consume as much data as they like, many in the North or in remote regions have far slower access speeds and face barriers to consuming the data they need.

That’s a challenge. Because the Internet should be universal. It’s a tool for socio-economic development, for education, for access to government, for entertainment, and for safety and security. And when people can’t connect to those services, they become isolated and disconnected. They fall behind.

This digital divide is a priority for us. The need to close it was the impetus behind our creation of the Broadband Fund last year. The fund will provide up to $750 million over five years for projects that will improve broadband access and mobile wireless in those communities and regions of the country in which such services do not meet our universal service objective.

I am pleased to tell you that we are issuing our first call for project applications today. In it, we invite applicants to propose all types of projects targeted at making meaningful improvements in broadband and mobile infrastructure in the Yukon, the Northwest Territories and Nunavut, as well as satellite-dependent communities across Canada. We chose to target these regions in our first call for applications because these are the parts of the country in which there is a significant need for improvement.

How significant? The latest data tells us that no households in the Yukon, the Northwest Territories and Nunavut have access to a broadband service that meets the universal service objective, and 72% of major roads are not covered by LTE service. The digital divide is also evident in satellite-dependent communities across the country where there is no terrestrial connectivity.

In addition to our call for applications, we released a revised application guide and maps to help parties submit their applications. The guide provides information to assist parties in the completion of applications, and the criteria we will use to evaluate and select projects for funding. All this information and more is available on our website.

Applications are due in four months, so parties have time to prepare and submit their materials.

Canada’s digital divide is wide. We know that. And we know that demand for funding from the Broadband Fund will likely exceed the supply of money we have available. That’s why we have put in place rigorous project-selection criteria that will help us focus funding on regions in which needs are greatest.

Our call for applications for projects in northern and satellite-dependent communities is only the first we will make. We understand there are significant access issues elsewhere in the country, and we won’t forget about those regions. Watch for a comprehensive, Canada-wide call for applications later this year.

We have high hopes for the Broadband Fund, the projects it will inspire, and the change it promises. But innovation won’t come from only us. It will require government and private industry to pull in the same direction. On that note, I want to take a moment to recognize the Government of Canada for its Budget 2019 pledge to commit $1.7 billion in new funding to provide high-speed Internet access to all Canadians. In other words, to help close the digital divide.

The government has indicated it will coordinate its activities with provinces, territories and federal institutions such as the CRTC to maximize the impact of these investments. We at the CRTC will support this effort to the fullest extent of our mandate and independence.

As we do so, we will continue to work on other items that will foster further broadband competition, and support efficient facility deployment.

Conclusion

I’ve spoken about creating a foundation for innovation in my remarks, and I want to come back to that point as I conclude. You’ve heard me talk at length this afternoon about the challenges before our telecommunications industry, and the need for the CRTC as a regulator to ensure Canadians’ needs are being met.

We’ve put in place a series of measures to protect consumers, respond to their demands, and lay a foundation for innovation.

Money from the Broadband Fund, for example, will soon start flowing into projects that will better serve rural and remote communities—to close the digital divide.

We will have a new wireless framework in place that will ensure there is greater competition and affordability in the marketplace, and new innovative solutions that serve Canadians well, and allow businesses to prosper.

We are laying the groundwork for the deployment of 5G technology that will be the wireless industry’s arguably greatest-ever advance.

I look forward to working with you all to meet these challenges ahead, and to embrace the opportunities they afford us all.

Thank you.


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